EBITDA up 25 per cent at INR 307 cr; Net Profit up 47 per cent at INR 120 cr
Biocon, the Asian biopharmaceuticals company, today announced its consolidated financial results for the fiscal first quarter ended June 30, 2018.
Commenting on the highlights, Chairperson & Managing Director, Kiran Mazumdar-Shaw stated, “We started the year with a robust Q1FY19 recording an overall revenue growth of 21 per cent at INR 1,193 crore and a 47 per cent increase in Net Profit at INR 120 crore, driven by a strong performance across our business segments. This performance was led by a 36 per cent growth in our Biologics business and a 39 per cent increase in Research Services revenues.”
“The approval and launch of our biosimilar Pegfilgrastim, Fulphil, in the US is a significant milestone for Biocon and sets the tone for the future success of our biosimilars business. The cGMP approvals for our drug products manufacturing facility in Bengaluru by both the US FDA and EMA demonstrates our commitment to provide high quality products to address the growing needs of patients for affordable biosimilars in these markets. These developments augur well for a strong financial performance in FY19,” she adds.
Highlights:
- Fulphila, co-developed by Biocon and Mylan, becomes the first biosimilar Pegfilgrastim to be approved and launched in the US Biocon is the first Company from India to have two biosimilars approved by the US FDA.
- Biocon’s sterile Drug Product manufacturing facility in Bengaluru receives EIR from US FDA and EU GMP certification.
- Presentations made at American Society of Clinical Oncology (ASCO) annual meeting in June 2018 for novel biologic Nimotuzumab (BIOMAb EGFR) and biosimilar Trastuzumab (Ogivri).
- PK-PD data on novel Insulin Tregopil presented at American Diabetes Association Scientific Sessions in June 2018.
- Syngene extends its collaboration with Baxter upto 2024 and strengthens its growing client base.
Financial Highlights (Consolidated): Q1FY19
As per IND-AS In Rs Crore, except growth numbers
| Particulars | Q1FY19 | Q1FY18 | Growth |
| INCOME | |||
| Small Molecules | 400 | 363 | 10% |
| Biologics | 250 | 184 | 36% |
| Branded Formulations | 147 | 130 | 13% |
| Research Services | 406 | 291 | 39% |
| Inter-segment | (79) | (34) | 129% |
| Revenue from Operations# | 1124 | 934 | 20% |
| Other Income | 69 | 54 | 27% |
| TOTAL REVENUE | 1193 | 988 | 21% |
| EBITDA | 307 | 246 | 25% |
| Interest & Finance charges | 18 | 16 | 9% |
| Depreciation & Amortisation | 99 | 99 | 0% |
| PBT | 191 | 135 | 41% |
| Net Profit | 120 | 81 | 47% |
| R&D Expenses in P&L | 44 | 58 | (24%) |
| Gross R&D Spends | 88 | 96 | (8%) |
| EBITDA Margin | 26% | 25% | |
| Core EBITDA Margin | 27% | 29% | |
| Net Profit Margin | 10% | 8% | |
| #includes Licensing Income | 5 | 8 | (38%) |
Notes: Figures above are rounded off to the nearest cr; % based on absolute numbers.
Executive Commentary:
Performance Review: Q1FY19
Biocon’s total revenue for Q1FY19 at INR 1,193 crore grew by 21 per cent, Net Profit at INR 120 crore reported a growth of 47 per cent.
EBITDA at INR 307 crore grew 25 per cent, with an EBITDA margin of 26 per cent for Q1FY19.
Core EBITDA margin for Q1FY19 (net of licensing, impact of forex and R&D) stood at 27 per cent. Net Profit margin stood at 10 per cent. Licensing Income for the quarter was INR 5 crore and Other Income stood at INR 69 crore. Net R&D expenses for the quarter stood at INR 44 crore while Gross R&D expenses were INR 88 crore corresponding to 12 per cent of our operating revenue (excluding Syngene).
Business Segment Review: Q1FY19
Small Molecules: APIs & Generic Formulations
The Small Molecules business reported a revenue growth of 10 per cent for the quarter at INR 400 crore. This was largely led by the sales of key APIs including immunosuppressants and Generic Formulations. several Drug Master Files (DMFs) in developed markets and key emerging markets during the quarter, strengthening Small Molecule APIs pipeline. The Generic Formulations business, which currently accounts for a small fraction of Small Molecules segment revenue, recorded strong topline growth on the back of market share gains for its Rosuvastatin Calcium formulation in the US. The company also launched Simvastatin tablets in the US this quarter.
Biologics: Biosimilars & Novels
The Biologics segment, comprising Novel Biologics and Biosimilars, recorded a strong growth of 36 per cent at INR 250 crore in the quarter. This was largely driven by higher sales of biosimilar monoclonal antibodies (mAbs) in emerging markets, supported by Insulins’ business.
Biosimilars-
Insulins & Analogs
During the quarter, the company’s insulins portfolio gained market share in several emerging markets such as Malaysia, Algeria and UAE. The brand Insugen, now holds a 75 per cent share of the rh-insulin market in Malaysia. During the quarter, several regulatory submissions for Insulin Glargine in CIS (Commonwealth of Independent States) and MENA ( Middle East & North Africa) regions were made. For the US market Biocon and its partner Mylan are generating additional clinical data for Insulin Glargine, in support of the manufacturing site change from Bengaluru to Malaysia. All activities as agreed with the US FDA in this regard are progressing as planned and it will expeditiously provide the requested data to the regulator in response to the Complete Response Letter (CRL) we received for Insulin Glargine. It does not anticipate any impact on the approval and launch timing of Insulin Glargine in the US.
Monoclonal Antibodies & Recombinant Proteins
Biocon’s partner Mylan has launched the first US FDA-approved biosimilar Pegfilgrastim, Fulphila, as a more affordable therapy option for cancer patients undergoing chemotherapy in the US Fulphila is the first biosimilar Pegfilgrastim (pegfilgrastim-jmdb) to be approved by the US FDA in June 2018. Biocon is the first company from India to have its biosimilar commercialised in the US. The regulatory reviews of the biosimilar Pegfilgrastim dossier in EU, Australia and Canada are progressing well.
Through the company’s biosimilar Trastuzumab, it continued to enhance access to a critical biologics therapy for cancer patients in several emerging markets. During the quarter, it witnessed strong retail market uptake of biosimilar Trastuzumab in Brazil. Zedora, sold through its partner Libbs Farmaceutica, is the first biosimilar Trastuzumab approved in Brazil. It also maintained a robust market share for the biosimilar Trastuzumab in Algeria, where it enjoys wide acceptance from patients and prescribers. Several regulatory submissions for biosimilar Trastuzumab in the CIS, LATAM & MENA regions, during Q1.
The biologics Drug Substances and Drug Products facilities in Bengaluru and Malaysia received approvals from regulatory agencies of several emerging and developed markets, including EU GMP certification and US FDA EIR for the Drug Products facility in Bengaluru. During Q1, Biocon and Mylan presented 48-week additional data from the Heritage study at the 2018 American Society of Clinical Oncology (ASCO) Annual Meeting in Chicago, which further demonstrated that biosimilar Trastuzumab, Ogivri does not have any clinically meaningful differences in terms of safety, purity and potency in comparison to the reference product, Herceptin.
In order to advance its market entry in EU and certain other markets, Biocon and Mylan agreed to a commercial arrangement between Mylan and a third party for an advanced stage Etanercept asset. Biocon retains its economic interest in this arrangement vis-a-vis Mylan, in accordance with our existing Etanercept collaboration agreement.
Novel Biologics
The basket of novel assets under development, representing an interesting combination of early and advanced stage programmes, progressed in the clinics in Q1FY19. Its oral insulin candidate, Insulin Tregopil, advanced in a pivotal Phase II/III study in Type 2 diabetes, with more patients in India being randomised during the quarter. Data has been presented from the Insulin Tregopil clinical programme at the American Diabetes Association’s (ADA) 78th Scientific Sessions held at Orlando, Florida. The pharmacokinetic-pharmacodyamic (PK-PD) data on Tregopil presented at ADA suggests an oral rapid acting insulin option for Type 2 diabetes patients.
Branded Formulations
The Branded Formulations business, which includes sales in India and UAE, reported a revenue of INR 147 crore, representing a YoY growth of 13 per cent in Q1FY19. The Branded Formulations – India (BFI) business performance was led by the Metabolics, Nephrology, Immunotherapy and Comprehensive Care divisions, with a strong growth reported by key brands like Insugen, Basalog, TACROGRAF, Renodapt and PSORID. In line with the company’s focus on key brands, the Top 10 brands in the India portfolio, reported a strong double digit growth accounting for a significant share of BFI sales this quarter.
A large investigator-initiated study of BIOMAb EGFR (Nimotuzumab), India’s first indigenously produced novel biologic launched by Biocon in 2006, established the ‘best-in-class’ status of the innovative therapy for head and neck cancer. The results of this large randomised, controlled clinical study at the Tata Memorial Hospital (TMH), Mumbai, were presented at the 2018 ASCO Annual Meeting. This study in head and neck cancer patients in India demonstrated that Nimotuzumab combined with chemo-radiotherapy successfully met the primary endpoint of median Progression Free Survival, which was three times than that of Standard of Care. Also, two posters and two paper presentations on managing diabetes with insulin therapy, at the global ADA Congress in Florida were made, which were well received.
Research Services – Syngene
The Research Services business through Syngene sustained its strong growth trajectory, reporting a revenue growth of 39 per cent at INR 406 crore, buoyed by the performance of discovery and development services for small molecules and continued traction in the biologics business.
During the quarter, Syngene extended its collaboration with Baxter till 2024 with an increased scope of work at its dedicated R&D center in Bengaluru. It also made significant progress in making the GSK collaboration operational, where a dedicated team of Syngene scientists continue to work closely with GSK’s global R&D teams in accelerating drug discovery using Syngene’s discovery services platforms.